Tips for Day Trading During High Volatility


With the recent spike in market volatility, the return of large market swings may become part of a day trader’s norm. In early February, the CBOE Volatility Index (VIX), which is largely used to measure turbulence in the market, surged to levels not seen since 2015. Intraday spreads in the VIX topped nearly 60% and the DOW experienced a record point drop.

While increased volatility produces additional trade opportunities, it also introduces increased risk. Now is an ideal time to refresh the nuances associated with trading volatile markets and utilize NinjaTrader’s innovative tools to help you navigate fast moving markets!

Thin Liquidity

In a typical highly liquid market, entries and exits of virtually any size fill without significant changes in price. However, large spreads (the difference between bid and ask prices) lead to transactions occurring at slower speeds and with increased price fluctuations.


Volatile markets indicate high volumes of trading activity. As there must be a buyer and a seller for a trade to occur, this spike in volume can bring disproportionate numbers of buyers and sellers to the market leading to delays in execution at the desired entry price.

NinjaTrader equips traders with various order types that can be used to help manage trades during periods of high volatility, thin liquidity and potential slippage.

Limit Orders

While a limit order does not guarantee you a fill, it is a tool you want to keep in your arsenal when trading in times of heightened volatility. When placing a limit order in NinjaTrader, the platform will request the trader to designate a minimum or maximum fill price. This is key as a standard market order will fill at the next best available price. Unfortunately, that price could be many ticks away from a desired entry point during fast moving markets.

Profit Targets & Stop Loss Orders

Setting a daily trading goal, whether it is a predetermined number of ticks or a dollar amount, is a popular method for managing a trading account. NinjaTrader’s ATM Strategies provide a semi-automated interface to manage positions. Pre-define your personal trading strategy by setting profit targets and stop loss orders and let NinjaTrader automate the order management based on your user defined settings.

Trailing Stop Orders

A number of traders spend countless hours perfecting the art of entering a trade, however few spend near as much time planning an exit strategy. Whether its setting a stop to breakeven or maintaining a 2:1 risk ratio, stop strategies are vital no matter the market conditions.

As an extension of an ATM Strategy, traders can deploy a Trailing Stop which will change the position of a stop loss order as a trade progresses in your favor. Should the market jump suddenly in the direction of your trade, a Trailing Stop will move in tandem with the market to help lock in those ticks gained.

Watch this quick video to learn more about order types within NinjaTrader:

No matter your approach to managing trades in volatile markets, employing proper risk mitigation measures is paramount. Get started with NinjaTrader for free today & leverage all of its unique trading tools to aid in your trade management.